Landstar System Inc. Reports Operating Results (10-Q)

Landstar System Inc. (NASDAQ:LSTR) filed Quarterly Report for the period ended 2012-06-30.

Landstar System, Inc. has a market cap of $2.34 billion; its shares were traded at around $50.3 with a P/E ratio of 18.6 and P/S ratio of 0.9. The dividend yield of Landstar System, Inc. stocks is 0.4%. Landstar System, Inc. had an annual average earning growth of 9.4% over the past 10 years.

Highlight of Business Operations:

Revenue for the 2012 twenty-six-week period was $1,384,996,000, an increase of $137,449,000, or 11%, compared to the 2011 twenty-six-week period. Revenue increased $136,773,000, or 11%, at the transportation logistics segment. The increase in revenue at the transportation logistics segment was primarily attributable to an 8% increase in the number of loads hauled and an increased revenue per load of approximately 3%. Included in the 2012 and 2011 twenty-six-week periods was $10,650,000 and $10,419,000, respectively, of transportation management fee revenue. Revenue at the insurance segment, representing reinsurance premiums from third party insurance companies that provide insurance programs to BCO Independent Contractors where all or a portion of the risk of loss is borne by the Company, was $17,602,000 and $16,926,000 for the 2012 and 2011 twenty-six-week periods, respectively.

Truck transportation revenue hauled by BCO Independent Contractors and Truck Brokerage Carriers (together the third-party truck capacity providers) for the twenty-six-week period ended June 30, 2012, which represented 92% of total revenue, was $1,280,180,000, an increase of $138,041,000, or 12%, compared to the 2011 twenty-six-week period. The number of loads hauled by third-party truck capacity providers in the 2012 twenty-six-week period increased 9% compared to the 2011 twenty-six-week period, and revenue per load for third-party truck capacity providers increased 3% compared to the 2011 twenty-six-week period. The increase in the number of loads hauled by third-party truck capacity providers was primarily attributable to increased demand, primarily related to truckload services utilizing unsided/platform trailing equipment and the addition of new independent commission sales agents. The increase in revenue per load on revenue hauled by third-party truck capacity providers was primarily attributable to both increased revenue per load and an increase in the percentage of revenue hauled on unsided/platform equipment, which has a higher revenue per load. Fuel surcharges on Truck Brokerage Carrier revenue identified separately in billings to customers and included as a component of Truck Brokerage Carrier revenue were $55,548,000 and $45,226,000 in the 2012 and 2011 periods, respectively. Fuel surcharges billed to customers on revenue hauled by BCO Independent Contractors are excluded from revenue.

Other operating costs were 5.0% and 7.5% of gross profit in the 2012 and 2011 twenty-six-week periods, respectively. The decrease in other operating costs as a percentage of gross profit was primarily attributable to the effect of increased gross profit, increased gains on sales of trailing equipment, a decreased provision for contractor bad debt and decreased trailing equipment maintenance costs. Insurance and claims were 9.2% of gross profit in the 2012 period and 11.9% of gross profit in the 2011 period. The decrease in insurance and claims as a percentage of gross profit was primarily due to the effect of an increase in the percent of gross profit contributed from revenue hauled by Truck Brokerage Carriers in the 2012 period, which has a lower liability exposure to the Company, a decrease in the severity of claims and lower unfavorable development of prior year claims in the 2012 twenty-six-week period. Selling, general and administrative costs were 34.3% of gross profit in the 2012 period and 35.1% of gross profit in the 2011 period. The decrease in selling, general and administrative costs as a percentage of gross profit was primarily attributable to the effect of increased gross profit, partially offset by an increased provision for bonuses under the Companys incentive compensation plan. Depreciation and amortization was 6.0% of gross profit in the 2012 period compared with 6.1% in the 2011 period. The decrease in depreciation and amortization as a percentage of gross profit was primarily due to the effect of increased gross profit in the 2012 period.

Revenue for the 2012 thirteen-week period was $735,973,000, an increase of $60,412,000, or 9%, compared to the 2011 thirteen-week period. Revenue increased $59,988,000, or 9%, at the transportation logistics segment. The increase in revenue at the transportation logistics segment was primarily attributable to an 8% increase in the number of loads hauled and an increased revenue per load of approximately 1%. Included in the 2012 and 2011 thirteen-week periods was $5,754,000 and $5,596,000, respectively, of transportation management fee revenue. Revenue at the insurance segment, representing reinsurance premiums from third party insurance companies that provide insurance programs to BCO Independent Contractors where all or a portion of the risk of loss is borne by the Company, was $8,831,000 and $8,407,000 for the 2012 and 2011 thirteen-week periods, respectively.

Truck transportation revenue hauled by third-party truck capacity providers for the thirteen-week period ended June 30, 2012, which represented 92% of total revenue, was $679,976,000, an increase of $58,454,000, or 9%, compared to the 2011 thirteen-week period. The number of loads hauled by third-party truck capacity providers in the 2012 thirteen-week period increased 8% compared to the 2011 thirteen-week period, and revenue per load for third-party truck capacity providers increased 1% compared to the 2011 thirteen-week period. The increase in the number of loads hauled by third-party truck capacity providers was primarily attributable to increased demand, primarily related to truckload services utilizing unsided/platform trailing equipment and the addition of new independent commission sales agents. The increase in revenue per load on revenue hauled by third-party truck capacity providers was primarily attributable to both increased revenue per load and an increase in the percentage of revenue hauled on unsided/platform equipment, which has a higher revenue per load. Fuel surcharges on Truck Brokerage Carrier revenue identified separately in billings to customers and included as a component of Truck Brokerage Carrier revenue were $30,107,000 and $25,918,000 in the 2012 and 2011 periods, respectively.

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